The Government has extended the paddy crop insurance to cover another major five food crops as well.
As announced by Minister of Finance Ravi Karunanayake for Budget2017, the Government has already launched the two-year National Food Production Program to ensureself-sufficiency inpotatoes, big onions, chilies, maize and soya beans. Accordingly, the farmers of these crops will also receive crop insurance as in the case of paddy cultivation. Farmers under this scheme will be paid compensation up to a maximum of Rs. 10,000 per acre for crop damages in times of any natural calamity.
This agricultural insurance scheme is funded by 1% levy charged from the profits of all registered banks, financial institutions and insurance companies since 2013. This 1% levy is credited to National Insurance Trust Fund from which the farmers are paid compensation through the Agricultural and Agrarian Insurance Board.
Following the drought which hit several districts during the 2016/2017 Maha season, farmerswhose crops were affected were paid up to Rs. 10,000 per acre last month.
In addition, the Government in 2016 introduced a relief scheme named National Loan Protection Scheme to provide further relief to farmers who could not repay their bank loans due to damages caused to their crops.
Accordingly, the National Loan Protection Scheme initiated for the purpose on behalf of the farmers will pay their outstanding bankloansafter having assessed the crop damages. The Government has estimated that some Rs. 500 million will have to be paid to banks in lieu of the loans obtained by farmers during the 2016/2017 Maha season. Even this scheme is supported by the 1% levy charged on the banks and financial institutions.
The National Insurance Trust Fund since the introduction of the 1% levy on profits of banks, financial and insurance institutions has so far received Rs. 5,069.81 million and disbursed Rs. 3,932.34 million as the payment for crop damages and other relief to farmers.
Another Rs. 500 million has been earmarked to be provided to Agricultural and Agrarian Insurance Board to provide relief to farmers under the National Loan Protection Scheme.
Sources : FT.lk